Blockchain in Automotive – Fragmented Sector to Focus on New Technologies

In May 2018, some of the biggest names across the automotive industry announced that they are joining together to form the MOBI Consortium. MOBI stands for “Mobility Open Blockchain Initiative” and the group will investigate the use of blockchain in automotive development. It aims to “make mobility safer, greener, and more affordable”.

The MOBI consortium is made up of partners, sponsors, and affiliates. Each group has a range of participants from (respectively) the car manufacturing industry, the blockchain/tech consultancy space, and different agencies that touch on both.

Partners include car manufacturing giants BMW, Ford, General Motors and Renault, as well as car parts manufacturers ZF Friedrichshafen and Bosch.

Sponsors are made up of established blockchain and consultancy firms such as ConsenSys, IOTA, IBM, and Accenture. Conversely, other sponsors include blockchain startups new to the space such as Foam (location services) and ShareRing (sharing services).

Finally, the affiliate group comprises agencies and NGOs including the World Economic Forum, Blockchain at Berkeley and Hyperledger.

We already have some insights into the use of blockchain in automotive initiatives by individual manufacturers such as Porsche. However, MOBI aims to take an open-source approach to the blockchain. MOBI describes itself as blockchain agonistic and will explore industry-wide solutions for how blockchain technology can be integrated into the broader automotive space.

In this article, we investigate some of the possibilities that could be enabled by industry-wide adoption of blockchain and related technology within the automotive sector.

Integration Across the Automotive Industry

Globally, the automotive sector is enormous. Think about it – you don’t just buy a car. In order to get it on the road, then you also need to take into account any or all of the following, depending on where you live:

Driving test certification/license to drive

Financing of the vehicle – do you buy or lease?

Legal registration of ownership

Roadworthiness tests

Insurance

Road taxes

Congestion charges or pollution taxes

Maintenance and repairs

Currently, all these requirements are mostly disconnected. The automotive sector is poorly integrated which in turn leads to numerous issues. These include high insurance costs, road crime, and poorly maintained vehicles.

Use cases – blockchain in automotive initiatives

Utilizing industry-wide distributed ledger technology could lead to a more harmonized and integrated infrastructure. Below are some ways this could happen.

Blockchain in Automotive Supply Chain and Manufacturing

A blockchain database can register the parts used in the car manufacturing process. Similarly, the manufacturing process itself can also be recorded. This could show which humans and robots were involved at which step, including quality checks. Dealerships could ultimately take delivery of every vehicle complete with its own blockchain record.

Blockchain in Vehicle Maintenance and Repairs

We could also see maintenance and repairs streamlined using a similar blockchain-based system. A mechanic could easily check the vehicle assembly record, see which parts were used, and log their own repair work on the same vehicle blockchain record.

Such digital records of car parts could help reduce incidences where counterfeit vehicle parts are used, either in manufacturing or repairs. It would also help to increase trust in the value and integrity of car repairs, which has always been fairly opaque to those who don’t know their way around a car engine.

Blockchain-based Licensing and Registration

If car manufacturers can log the vehicles themselves on the blockchain, we could also have a similar blockchain-based system to track and trace vehicle ownership. Such an integrated system would help to reduce the incidences of vehicles being sold for use in criminal endeavors, as well as increasing consumer trust in the notoriously untrustworthy business of trading used cars.

Blockchain brings the possibility of the ultimate in global driver and vehicle licensing integration – a standardized worldwide register of licensed drivers and vehicles. Of course, much of the current excitement in the sector is on AI and driverless cars. Technologically, developments in this area are likely to outpace the political and bureaucratic obstacles to achieving such a global register of human drivers.

Nevertheless, if humans do continue to drive cars, the possibility of having our own global self-sovereign driver ID may eventually exist.

Insurance, Taxes, Congestion Fees, and Other Usage-Based Fees

We could make payments like insurance premiums, road taxes, and other peripheral payments entirely digitally and automatically.By using IoT and location tracking technologies, these kinds of payments could also evolve to become purely usage-based. So, if you are driving in London or Stockholm, you could make automatic congestion charge payments from digital wallets.

Insurance companies can get a better picture of what occurred in the event of an accident claim. This could, therefore, speed up payouts and reduce incidences of spurious claims.

Location tracking services also allow the usage and mileage history of the vehicle to be accurately and indisputably recorded. We could see accurate and unbiased valuations of vehicles performed using AI technology to make the necessary calculation-based decisions.

Blockchain-based Mobility Initiatives

Blockchain creates transparency in car and ride sharing, which in turn can increase trust between parties. Porsche has already been testing the use of smart contracts to lock and unlock vehicles.

Taking this forward, imagine you were renting a shared car. First of all, smart contracts would mean you could gain access only once you’ve paid a deposit to the owner with your digital wallet. IoT technology would also track the location of the car whilst you’re renting it. Smart contracts could provide automated insurance. Again, you could be paying insurance premiums, road tolls, and congestion fees only on a usage basis with payments deducted automatically from your digital wallet.

AI and Driverless Cars

If, or when, the driverless car becomes an everyday reality, blockchain serves an additional purpose. AI technology used in driverless cars will be dependent on complex, often split-second decision-making process. Therefore, logging these decisions on a blockchain means we could trace what happened if an accident occurs.

All of these possibilities illustrate how the deployment of blockchain in automotive businesses could better integrate the wider industry. An influential global consortium like MOBI may be able to drive such possibilities closer to reality.